1. Most Discussed
  2. Gainers & Losers

Warrant Traders beware ...

  1. rembrandt

    5,816 Posts.

    Hmmm... the latest scam to suck in the lemmings ...

    The CBAWOM saga continues and as a keen observer of the depth I have witnessed a pattern of behaviour by MM which is both concerning and worthy of a mention here for Warrant Traders ...

    Friday: The opening quotes (by MM) are $0.004/$0.007 ... CBA rose quickly on open to $27.48 or up 1.4% and Warrant quote is DOWN.

    For those who crunch their own BSOPM numbers, here are the I/Vols for this week ...

    31.25% 28.00% 26.75% 26.25% 25.50% ... you can see the problem ... 31.25% to 25.50% translates into a 65% premium claw-back ... you simply have no hope.

    For the week, CBA up from $26.56 to $27.45 (at time of this exercise) or 3.35% and CBAWOM quotes down 50% ... if you're in you are buggered.

    But there is more ...

    Have been observing both Bid/Ask and specifically recently the Ask side and noted the closing of the spread to $0.001 to entice BUYERS thinking they are getting a bargain and then 'shutting the gate'...

    Yesterday/today was typical .. opened this morning DOWN (of course) and mid-morning with no sales, closed the spread from $0.004/0.007 to $0.004/0.005 ... quickly sucked in 900,000 and quick as a flash ramped back to $0.007.

    That poor schmuck has just been screwed for about $2000 as we speak and doesn't know it ...

    Other Traders will see the Volume and be enticed to follow suit ...

    This practice by the MM is pro-active strategy and becoming a regular feature ...

    This is a TRAP for Traders ...

    Having sucked in the numbers ... then manipulate the I/Vol and quotes to their advantage ...

    Quotes in the last week have little relationship to movements in the underlying or BSOPM modeling (as the I/Vol numbers above show...) which the Warrant Market depends on for confidence ...

    Warrant Traders need to know that this practice is LEGAL ...

    And with no watchdog ... it is carte blanche.

    CONFIDENCE in the Warrant Market is imperative and upon which we all depend ...

    NO CONFIDENCE EQUALS NO MARKET ...

    The Warrant Issuer's need to lift their game ... if we pick winners ... we are entitled to get paid.

    I have written to both the Issuer and the ASX ... a prompt reply from the Issuer and with an undertaking to investigate the matter early next week ... not holding my breath.

    If you strike an I/Vol and the market moves then pay up ... don't scum it (I/Vol) repeatedly overnight to avoid paying up.

    It is called a FAIR GO ...

    If Warrant Issuer's are not prepared to pay up ... then get out of the marketplace ...




    This is only my (disgusted) view ... read the red stuff.

DISCLAIMER:
Before making any financial decisions based on what you read, always consult an advisor or expert.

The HotCopper website is operated by Report Card Pty Ltd. Any information posted on the website has been prepared without taking into account your objectives, financial situation or needs and as such, you should before acting on the information or advice, consider the appropriateness of the information or advice in relation to your objectives, financial situation or needs. Please be aware that any information posted on this site should not be considered to be financial product advice.

From time to time comments aimed at manipulating other investors may appear on these forums. Posters may post overly optimistic or pessimistic comments on particular stocks, in an attempt to influence other investors. It is not possible for management to moderate all posts so some misleading and inaccurate posts may still appear on these forums. If you do have serious concerns with a post or posts you should report a Terms of Use Violation (TOU) on the link above. Unless specifically stated persons posting on this site are NOT investment advisors and do NOT hold the necessary licence, or have any formal training, to give investment advice.

Top

Thank you for visiting HotCopper

We have detected that you are running ad blocking software.


HotCopper relies on revenue generated from advertisers. Kindly disable your ad blocking software to return to the HotCopper website.

I understand, I have disabled my ad blocker. Let me in!

Need help? Click here for support.